Week 19: No SGR Fix Before Reform, More Talk of a Public Plan

WASHINGTON -- After a procedural vote on Wednesday made it clear that a bill to reform Medicare's physician payment system won't pass any time soon, focus shifted back to the healthcare reform bills in the House and the Senate -- and to a public plan option.

Members of the House continued to grapple with what role a public insurance plan will play in its bill, while Senate Majority Leader Harry Reid (D-Nev.) seems set on including a public option in the Senate bill, although it's unclear if he can garner the necessary 60 votes for a bill with such an option in it.

Doc Payment Fix Fails

On Wednesday, a cloture vote to end debate on the bill that would eliminate the sustainable growth rate (SGR) formula used to determine Medicare reimbursements to physicians was defeated in the Senate 53 to 47. Had it passed, the cloture vote would have moved the bill itself, sponsored by Debbie Stabenow (D-Mich.), to a vote.

Doctors have long lobbied for a new payment mechanism -- one that does not mandate huge cuts in reimbursement year after year. Congress has voted at the eleventh hour to stall planned payment cuts seven times.

Stabenow's bill would erase the SGR, and reset the debt accumulated from the 1997 law to zero at a cost of about $245 billion. The bill did not lay out a new mechanism to pay doctors under Medicare, however.

Reid said the issue would resurface after a healthcare reform bill passes.

The AMA, a major backer of the SGR bill, said it was "deeply disappointed," but earlier in the week, the group's president had refused to back the Finance Committee's healthcare reform bill, the quid in a rumored quid-pro-quo deal trading a vote on the SGR bill for support on the broad reform package.

In the House

In the House, Speaker Nancy Pelosi (D-Calif.) and other House leaders continued to work to merge three separate bills into one healthcare reform bill, which she hopes to have ready sometime next week.

But a number of representatives are concerned about the cost of the bill. Three dozen moderate Democrats recently sent a letter to Pelosi and Majority Leader Steny Hoyer (D-Md.) threatening to withhold their votes if the bill doesn't rein in healthcare costs.

The signers of the letter, led by Reps. John Barrow (D-Ga.) and Glenn Nye (D-Va.), praised the Senate Finance bill, which will cut $81 billion from the federal deficit over 10 years, according to the Congressional Budget Office (CBO).

"We will be unable to support any healthcare legislation that doesn't meet the president's goals of driving down and holding down the cost of healthcare, as determined by CBO," the moderate Democrats wrote in the letter.

The CBO has not issued any final cost estimate for any permutations of the House bills. However, the Centers for Medicare and Medicaid Services (CMS) did score a bill that came out of one House committee and estimated it would increase the deficit by 2% every year.

In her weekly press conference, Pelosi said she and her colleagues are working toward a bill that will not add "one dime to the deficit, not in the first 10 years and not in the second 10 years."

She brushed off the CMS estimate by saying that bill "doesn't even exist any more," because so many changes have been made while melding three bills into one.

"There are many changes that have been made to the original bill in terms of coverage, in terms of pay-fors, and in terms of holding the insurance companies accountable," she said.

The House bill will include a public insurance option that will pay physicians at Medicare rates, plus an additional 5%.

Some moderate Democrats would like a public plan that allows doctors and hospitals to negotiate rates with Medicare, however. That version of a public plan was scored by the Congressional Budget Office as a more costly alternative, Pelosi has said. However, those figures have not been made public on the CBO Web site.

In the Senate

Meanwhile, although it looked as if the final Senate bill would not contain a public option, Reid met with Pres. Obama on Thursday night to lay out his plan for including a government-run plan that would allow states to opt-out, TheNew York Times reported.

The bill approved last week by the Finance Committee does not include a public insurance option, but the bill reported out of the Health, Education, Labor and Pensions (HELP) Committee does. Finance Committee Chairman Max Baucus (D-Mont.), has said the public plan wouldn't get the 60 votes necessary to pass in the Senate, because conservatives and centrists wouldn't vote in favor of it.

However, opinion polls this week showed the public is increasingly warming to the idea.

Sen. Olympia Snowe (R-Maine), said she favors a back-up public plan that would go into effect only if healthcare reform provisions failed to cover enough people with quality insurance.

She said she would not vote in favor of an "opt-in" public plan, according to Congressional Quarterly.

Snowe's vote is considered crucial when it comes time for a final floor vote. She was the only Republican in two Senate committees to vote in favor of healthcare reform.

Antitrust Exemption

Pelosi also said this week that the insurance reform bill in the House will include a provision to end the antitrust exemption afforded to the insurance industry.

The House Judiciary Committee approved a bill on Wednesday that would eliminate the insurance industry's 64-year-old exemption from antitrust laws that prohibit sharing cost information.

Critics argue that insurance companies are using a legal exemption from antitrust law to compare market prices with other companies to engage in "price-fixing" and "bid-rigging" for health insurance and medical liability policies.

However, those opposed to the bill say there's no evidence that insurance companies are using their exemption to bid-rig or price-fix, and that the real problem in the insurance industry is the "virtual monopoly" large companies are able to form.

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